DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. DYI's required rate of return is 8%. What is the profitability index of this project?

		0.86
		0.99
		1.14
		1.25

DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. DYI's required rate of return is 8%. Based on the capital budgeting techniques calculated previously, DYI Construction should:

		Accept the project because its PI is less than one
		Accept the project because its IRR is greater than its required rate of return
		Reject the project because its NPV is greater than zero
		Reject the project because its PB is less than four